Abstract
AbstractDomestic natural gas production has increased markedly in the United States, and now compressed natural gas (CNG) has the potential to become a cleaner and less expensive energy source than diesel fuel for use in the public transportation sector, especially for city bus fleets. This paper provides an economic analysis of possible CNG conversion for Lafayette, IN CityBus Corporation. It uses benefit–cost analysis to compare the total cost of three potential options for bus replacement: standard diesel, hybrid diesel‐electric, and CNG. A spreadsheet model was used to estimate the total cost of these three fleet options over a 15‐year project horizon. Results suggest that the CNG option has the lowest net present value (NPV) cost, and that cost savings would be larger if the corporation could obtain a grant for the CNG fueling station or if the project life span could expand to 20 years. From the environmental perspective, the CNG option would reduce greenhouse gas and particulate emissions particularly in comparison with the diesel option. Monte Carlo simulation was used to examine the inherent riskiness of the three fleet options. CNG is always lower cost than hybrid diesel‐electric. Depending on assumptions regarding the underlying price distributions, the CNG option has a 51–100% chance of being lower cost than the standard diesel option.
Highlights
This year, the U.S Energy Information Administration (EIA) has examined different ways to represent energy consumption in the Annual Energy Review (AER)
Through 1988, data are for electric utilities only; beginning in 1989, data are for electric utilities and independent power producers
4 Blast furnace gas, propane gas, and other manufactured and waste gases derived from fossil fuels
Summary
Includes lease condensate. 2 Natural gas plant liquids. 3 Conventional hydroelectric power, biomass, geothermal, solar/photovoltaic, and wind. 4 Crude oil and petroleum products. 8 Solar thermal and photovoltaic (PV) electricity net generation (converted to Btu using the fossil-fuels heat rate—see Table A6), and solar thermal direct use energy. 5 Petroleum products supplied, including natural gas plant liquids and crude oil burned as fuel. 4 The U.S consumption value in this table does not match those in Tables 1.1 and 1.3 because it: 1) does not include biodiesel; and 2) is the sum of State values, which use State average heat contents to convert physical units of coal and natural gas to Btu. 5 Includes $158 million for coal coke net imports, which are not allocated to the States. General Services Administration. 2 Health and Human Services. 3 National Aeronautics and Space Administration. 4 See Table 1.11 for list of agencies
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